‘We’ve dealt with recessions before’: Jamie Dimon says geopolitics is world’s biggest risk

JPMorgan Chase & Co. CEO Jamie Dimon said geopolitics after Russia’s invasion of Ukraine is the biggest risk, bigger than high inflation or the U.S. recession.

Global markets have been hurt over the past week as the US Federal Reserve signaled that interest rates are likely to remain high for an extended period of time as it seeks to sustainably bring inflation back to its 2% target.

Dimon told India’s CNBC TV-18 on Tuesday that people “need to be prepared for higher oil and gas prices, higher interest rates,” but that the U.S. economy is likely to weather any disruption. Ta. However, the war in Ukraine has polarized the world’s major powers and shows no signs of slowing down.

“I think my biggest concern is the geopolitical situation, but I don’t know how that will affect the economy,” he added.

“I think the humanitarian part is much more important. I think it’s also very important for the future of the liberal democratic world. We may be at a tipping point for the liberal democratic world. That’s how seriously I take it.”

In recent months, further negative pressure on the market has been brought about by the slowdown in the Chinese economy, mainly caused by the huge real estate market downturn.

Asked about the potential impact of the recession on the long-term outlook for China and the global economy, Dimon reiterated that the war in Ukraine has strained relations between the economic powers and that the real epicenter of the risk is Eastern Europe. did.

“Far more important to me than that is the war in Ukraine, the movement of oil and gas and food, which affects all global relations, but very importantly between the U.S. and China. It’s a relationship,” Dimon said.

“I think the United States is taking this very seriously, but I’m not sure how other countries are taking it. European democracies are being invaded by nuclear threats. I think it was a good response. But what will happen if things continue like this?”Until the war is somehow resolved, it will affect all our relationships. ”

China and India have sought to use the close ties with Russia signaled by the BRICS alliance to maintain a neutral position regarding the war and position themselves as potential peace mediators. The city of Beijing has submitted a peace proposal to resolve the conflict in Ukraine, but it has so far failed to gain support.

This has put the world’s two most populous countries at odds with the United States and Europe, which have provided arms and financial aid to Ukraine in the belief that only a victory for Ukraine can restore international order.

“India is on its own path. We are clear on our priorities when it comes to national security and what that means,” Dimon said.

“I’m an American patriot, so the government decides foreign policy, not J.P. Morgan, but I think Americans should stop thinking of China as a 10-foot giant. We have a per capita GDP of $80,000, we have all the food and water we need, the energy we need, and we have incredible benefits of free enterprise and freedom. ”

The Wall Street giant said he was positive about renewed U.S. engagement with China on issues such as trade and national security, saying that even if it caused a “recession, it would not balance the U.S.-China trade and investment relationship.” I would like to see more involvement in restoring this.” It’s starting to unravel little by little. ”

“But it’s not just America. Every country is rethinking their grid. What is national security? Do we have energy lines that we rely on? Do we need semiconductors from China? Where are the rare earths coming from? Can we get it? Ukraine woke everyone up to that, and it’s now a permanent situation,” Dimon said.

When asked if geopolitics is the biggest risk facing the world today, Dimon said, “Absolutely.”

“We’ve dealt with inflation, deficits and recessions before, but we’ve hardly seen anything like this since World War II,” he added.